British Prime Minister Theresa May on Friday proposed a two-year transition period after Brexit to EU leaders.
May delivered a keynote speech in Florence, Italy in a week which saw her at loggerheads with some of her cabinet ministers who have made their own statements on the Brexit issue.
Speaking at a news conference, May said the transition period would ensure trading "on current terms," and would be in British and EU interests.
"We want to make an ongoing contribution to cover our fair share of the costs involved," she said, focusing on how the post-Brexit transitional period would be financed.
British and EU negotiators have struggled to make progress over issues such as the so-called “divorce bill” incurred by the U.K. leaving.
The British leader ruled out a Canada-style free-trade deal or EEA membership, saying: "We can do so much better" as the U.K. is the largest trading partner of the EU.
"Let's think creatively, let's be ambitious about what we can achieve," she said.
Stating that the U.K. is in a totally different relationship with the EU than Norway or Canada, May said it is in everyone’s interests to discover a "creative solution" to trading.
She stressed there is no need to apply customs tariffs, claiming that the U.K. and EU have common values on free trade and competition.
The British premier also said she was upbeat about the Brexit talks, adding: "I believe we can be optimistic about the future we build for the EU and the U.K."
"We may be leaving the European Union, but we are not leaving Europe," she said.
However, the main opposition Labour Party accused May of expending more energy on disputes with her cabinet colleagues.
Labour leader Jeremy Corbyn said: “Fifteen months after the EU referendum the government is still no clearer about what our long-term relationship with the EU will look like.
"The only advance seems to be that the prime minister has listened to Labour and faced up to the reality that Britain needs a transition on the same basic terms to provide stability for businesses and workers.
“That’s because Theresa May and her Conservative cabinet colleagues are spending more time negotiating with each other rather than with the EU," he added.
The British electorate voted to leave the EU in a June 2016 referendum. The country now has just over 18 months to finalize the terms of its departure.
May’s ruling Conservative Party performed poorly in a general election earlier this year and is now in a deal with a small Northern Irish party to secure a governing majority in parliament.